State Tax Commission of Missouri
v.) Appeal Number 09-10236
ST. LOUIS COUNTY,MISSOURI,)
DECISION AND ORDER
Decision of the St. Louis County Board of Equalization reducing the assessment made by the Assessor is SET ASIDE.True value in money for the subject property for tax years 2009 and 2010 is set at $590,000, residential assessed value of $112,100.Complainant appeared pro se.Respondent appeared by Associate County Counselor Paula J. Lemerman.
Case heard and decided by Hearing Officer Maureen Monaghan.
The Assessor determined a valuation of the property of $650,000; $123,500 assessed valuation as residential.Complainant appealed to the Board of Equalization who reduced the valuation to $624,000, $118,560 assessed valuation.The Complainant appealed to the State Tax Commission, on the ground of overvaluation, the decision of the St. Louis County Board of Equalization.The Commission takes this appeal to determine the true value in money for the subject property on January 1, 2009.The Hearing Officer, having considered all of the competent evidence upon the whole record, enters the following Decision and Order.
FINDINGS OF FACT
1.Jurisdiction.Jurisdiction over this appeal is proper.Complainant timely appealed to the State Tax Commission from the decision of the St. Louis County Board of Equalization.A hearing was conducted on July 1, 2010, at the St. LouisCountyGovernmentCenter,Clayton,Missouri.
2.Assessment.The Assessor appraised the property at $650,000, residential assessed value of $123,500.The Board of Equalization reduced that assessment.
3.Subject Property.The subject property is located at 1624 Frontenac Woods Court, Frontenac, Missouri.The property is identified by locator number 20M430193.The property consists of a 1.03 acre lot improved by a 1.5 story contemporary, vinyl sided, single-family structure of good quality construction.The house was built in 1979 and appears to be in average to good physical condition.The residence has eight rooms, with four bedrooms, two full baths, and contains 3,403 square feet of living area.There is a partial basement, with 935 square feet of finished area and an attached three-car garage.
Complainant testified on his own behalf and introduced the following exhibits:
Chart of Neighboring Properties
BOE Appeal Form
Complaint for Review of Assessment
Articles from Post-Dispatch
Sustained/Relevance & Hearsay
Articles from Real Estate News
Sustained/Relevance & Hearsay
Listing of Sales from Assessor’s Data
Overruled/Relevance & Hearsay
Exhibit A was a chart listing the name of owners and addresses of neighboring properties.The chart also contained the Assessor’s office mass appraisal valuation from 2007 and 2009 on each property and the change of the valuation from 2007 to 2009.The County objected to the exhibit based upon relevance.Objection was sustained as the information does not prove valuation of the subject property as of January 1, 2009.
Exhibits B and C were the Complainant’s appeal to the Board of Equalization form and the Complaint for Review of Assessment.Exhibits B & C were admitted as a summary of the Complainant’s argument for a reduction of value but not as evidence to base a valuation upon.
Exhibits D and E are articles from two publications.Exhibits were excluded for relevance and hearsay.
Exhibit F is a listing of sales from the Assessor’s website.The Complainant marked sales near his property.Some of the sales on the list were used or considered by the county when doing the appraisal on the property.The information from the sales is limited and does not provide a basis for comparability. The information also includes foreclosure sales.One property sold for $485,000 and then again for $750,000.Sales also included teardowns.
Complainant’s evidence was not substantial and persuasive to rebut the presumption of correct assessment by the Board and establish the true value in money as of January 1, 2009, to be $513,500, as proposed.
5.Respondent’s Evidence.Respondent presented the appraisal report and testimony of Robert Koch, Missouri Certified Residential Real Estate appraiser, to establish the fair market value for the subject as of January 1, 2009, to be $590,000.The properties relied upon by Respondent’s appraiser were comparable to the subject property. The three properties were located within less than a mile of the subject.Each sale property sold at a time relevant to the tax date of January 1, 2009.The sale properties were similar to the subject in style, quality of construction, age, room, bedroom and bathroom count, living area, location, site size and other amenities of comparability.The appraiser properly adjusted the comparable for differences existing between the subject and the comparable to provide an indicated value for the subject.Adjustments were made for the subject property being well maintained but dated.Respondent’s evidence met the standard of substantial and persuasive to rebut the presumption of correct assessment by the Board and establish the value of the subject, as of January 1, 2009, to be $590,000.
CONCLUSIONS OF LAW AND DECISION
The Commission has jurisdiction to hear this appeal and correct any assessment which is shown to be unlawful, unfair, arbitrary or capricious.The hearing officer shall issue a decision and order affirming, modifying or reversing the determination of the board of equalization, and correcting any assessment which is unlawful, unfair, improper, arbitrary, or capricious.
Presumptions In Appeals
There is a presumption of validity, good faith and correctness of assessment by the CountyBoardof Equalization. The presumption in favor of the Board is not evidence.A presumption simply accepts something as true without any substantial proof to the contrary.In an evidentiary hearing before the Commission, the valuation determined by the Board, even if simply to sustain the value made by the Assessor, is accepted as true only until and so long as there is no substantial evidence to the contrary.The presumption of correct assessment is rebutted when the taxpayer, or respondent when advocating a value different than that determined by the Board, presents substantial and persuasive evidence to establish that the Board’s valuation is erroneous and what the fair market value should have been placed on the property.The taxpayer presented no evidence which rebutted the presumption of correct assessment.Respondent, on the other hand, presented substantial and persuasive evidence that rebutted the presumption and established the true value in money for the property under appeal as of January 1, 2009.
Standard for Valuation
Section 137.115, RSMo, requires that property be assessed based upon its true value in money which is defined as the price a property would bring when offered for sale by one willing or desirous to sell and bought by one who is willing or desirous to purchase but who is not compelled to do so.True value in money is defined in terms of value in exchange and not value in use.It is the fair market value of the subject property on the valuation date.Market value is the most probable price in terms of money which a property should bring in competitive and open market under all conditions requisite to a fair sale, the buyer and seller, each acting prudently, knowledgeable and assuming the price is not affected by undue stimulus.
Implicit in this definition are the consummation of a sale as of a specific date and the passing of title from seller to buyer under conditions whereby:
1.Buyer and seller are typically motivated.
2.Both parties are well informed and well advised, and both acting in what they consider their own best interests.
3.A reasonable time is allowed for exposure in the open market.
4.Payment is made in cash or its equivalent.
5.Financing, if any, is on terms generally available in the Community at the specified date and typical for the property type in its locale.
Methods of Valuation
Proper methods of valuation and assessment of property are delegated to the Commission.It is within the purview of the Hearing Officer to determine the method of valuation to be adopted in a given case.Missouri courts have approved the comparable sales or market approach, the cost approach and the income approach as recognized methods of arriving at fair market value.Complainant did not present an opinion of value derived from any accepted appraisal methodology.Respondent’s appraiser concluded his opinion of value based upon the sales comparison approach.
Complainant Failed to Meet Burden of Proof
In order to prevail, Complainant must present an opinion of market value and substantial and persuasive evidence that the proposed value is indicative of the market value of the subject property on January 1, 2009.There is no presumption that the taxpayer’s opinion is correct. The taxpayer in a Commission appeal still bears the burden of proof.The taxpayer is the moving party seeking affirmative relief.Therefore, the Complainant bears the burden of proving the vital elements of the case, i.e., the assessment was “unlawful, unfair, improper, arbitrary or capricious.”
Owner’s Opinion of Value
The owner of property is generally held competent to testify to its reasonable market value.The owner’s opinion is without probative value however, where it is shown to have been based upon improper elements or an improper foundation.The Complainant’s main argument was the change in valuation from the Assessor’s 2007 to the 2009 mass appraisal valuation of neighboring properties.The Complainant reviewed all the valuations and determined that 23 properties had a reduction in value, 7 increased in value and 5 remained at the same valuation.Complainant argued that his property went from $610,000 valuation in 2007 to a $650,000 in 2009 and therefore was only 1 of the 7 valuations that increased.In 2007, the Complainant’s property was valued at $831,000 in 2007 by the Assessor’s mass appraisal system.The Assessor’s mass appraisal system reduced the valuation to $650,000 in 2009.
The Complainant also presented sales data gathered from the Assessor’s data.The Complainant did not verify the sales or determine if any of the sale properties were comparable.In reviewing his list of properties, it is noted that the sales include foreclosure and land only sales.The list also included homes that were 20 years newer that the subject property.
Complainant wished to present newspaper, Internet or professional journal articles that provide statistical data relative to home values.Such information may be interesting and probative as to general trends, but it is not probative as to what a single property would have sold for on the valuation date for an ad valorem tax appeal.The reasoning of the taxpayer is that based on national, state or regional trends that housing values have been in a decline.Therefore,
the value of the taxpayer’s property must have declined from the 2007-08 assessment to the 2009 assessment.
The first defect in this reasoning is that it assumes a critical fact that has not been established, i.e. that the property under appeal was valued in the 2007-08 assessment cycle at fair market value as of January 1, 2007.All of the charts, graphs, studies and conclusions regarding the housing market from 2007 up to 2009 do not establish that the value place on the property as of January 1, 2007, by the Assessor was in fact its true value in money.
The second critical aspect of this faulty line of reasoning is to assume another critical, but unproven fact, i.e., that some percentage decline in the overall housing market is applicable to the property under appeal.In other words, what taxpayers seek to establish from general trends of decline in value is that such and such an average is applicable to their given property.The existence of an average percentage decline in home values does nothing to prove that the subject has declined by that percentage.
In short, reliance on such information to establish an opinion of value relying upon two fatally flawed speculations.As such, the documents have no probative value and therefore lack relevance on the issue of fair market value of Complainant’s property as of January 1, 2009.
The owner’s opinion was not established upon proper elements or a proper foundation.Therefore, it can be given no probative value.The taxpayer failed to meet his burden of proof to present substantial and persuasive evidence to both rebut the presumption of correct assessment by the Board and to prove the fair market value as of January 1, 2009.
Respondent Proves Value
Respondent, when advocating a value different from that determined by the original valuation or a valuation made by the Board of Equalization, must meet the same burden of proof to present substantial and persuasive evidence of the value advocated as required of the Complainant under the principles established by case law.Exhibit 1 and the testimony of Respondent’s expert presented substantial and persuasive evidence to establish a fair market value as of January 1, 2009, to be $590,000 for the subject.Mr. Koch developed his opinion of value relying upon an established and recognized approach for the valuation of real property, the sales comparison or market approach.The sales comparison approach is generally recognized to be the most reliable methodology to be utilized in the valuation of single-family residences.The adjustments made the Mr. Koch were consistent with generally accepted guidelines for the appraisal of property of the subject’s type.The adjustments properly accounted for the various differences between the subject and each comparable.
The assessed valuation for the subject property as determined by the Assessor and sustained by the Board of Equalization for St. Louis County for the subject tax day is SET ASIDE.
The assessed value for the subject property for tax years 2009 and 2010 is set at $112,100.
Application for Review
A party may file with the Commission an application for review of this decision within thirty days of the mailing date set forth in the Certificate of Service for this Decision.The application shall contain specific facts or law as grounds upon which it is claimed the decision is erroneous.Said application must be in writing addressed to the State Tax Commission of Missouri, P.O. Box 146, Jefferson City, MO65102-0146, and a copy of said application must be sent to each person at the address listed below in the certificate of service.
The Collector of St. Louis County, as well as the collectors of all affected political subdivisions therein, shall continue to hold the disputed taxes pending the possible filing of an Application for Review, unless said taxes have been disbursed pursuant to a court order under the provisions of Section 139.031.8, RSMo.
Any Finding of Fact which is a Conclusion of Law or Decision shall be so deemed.Any Decision which is a Finding of Fact or Conclusion of Law shall be so deemed.
SO ORDERED July 15, 2010.
STATE TAX COMMISSION OFMISSOURI
Certificate of Service
I hereby certify that a copy of the foregoing has been mailed postage prepaid on this 15thday of July, 2010, to:Stan Dveris, 1624 Frontenac Woods Ct., St. Louis, MO 63131-3428,Complainant; Paula Lemerman, Associate County Counselor, County Government Center, 41 South Central Avenue, Clayton, MO 63105, Attorney for Respondent; Michael Brooks, ActingAssessor, County Government Center, 41 South Central Avenue, Clayton, MO 63105; John Friganza, Collector, County Government Center, 41 South Central Avenue, Clayton, MO 63105.
Contact Information for State Tax Commission:
Missouri State Tax Commission
301 W. High Street, Room 840
P.O. Box 146
Jefferson City, MO 65102-0146
 Hermel, Inc. v. STC, 564 S.W.2d 888, 895 (Mo. banc 1978); Chicago, Burlington & Quincy Railroad Co. v. STC, 436 S.W.2d 650, 656 (Mo. 1968); May Department Stores Co. v. STC, 308 S.W.2d 748, 759 (Mo. 1958).